On September 8, Ukraine celebrates the Day of Workers of the Oil, Gas, and Refining Industry. However, the Ukrainian fuel industry is currently facing serious challenges. On the eve of this professional holiday, we conducted a review of the situation – how the fuel sector is operating now and what difficulties it is overcoming.

The full-scale war with Russia has been ongoing for more than 2.5 years. The socio-economic situation in Ukraine remains difficult, and the fuel market is facing serious trials. Since the start of the war, many oil refineries have come under missile strikes by the Russians, and the Ukrainian market has been forced to shift to European imports.

Since the beginning of the full-scale conflict, Ukraine, having diversified its fuel supply sources, has reduced its dependence on Russia and Belarus. Currently, the primary fuel supplies come from the EU. However, the complex logistics of wartime are affecting domestic prices. During this period, fuel prices have almost doubled, and unfortunately, this is not the limit — prices will continue to rise.

Meanwhile, in recent weeks, the Verkhovna Rada has been working on Bill No. 11416-d, which proposes raising taxes, including for participants in the fuel market. If the bill is passed in its current form, retailers will be required to make monthly advance payments ranging from 30,000 to 80,000 UAH for each retail fuel outlet, depending on the types of fuel sold and whether they have licenses to sell tobacco and alcohol products. Consequently, this tax will be included in the final cost of fuel.

“If we’re not talking about large retailers, but rather small regional networks that serve a significant portion of the population, legislative changes may increase the burden on businesses. In the current difficult conditions, many of them are operating at break-even, but they maintain jobs and, equally important, ensure fuel supply to the population,” explains lawyer Alina Potapovych, a member of the “Fuel and Energy Business” Association. “It is clear that tax increases will be passed on to fuel prices, or companies will be forced to close. In that case, many localities could face difficulties in accessing fuel. There is hope that the authorities will take the situation into account and engage in dialogue with small and medium-sized businesses and the public.”

Moreover, the country’s energy infrastructure is in a difficult state and, to some extent, also relies on regular fuel that can be purchased at any gas station. Power outage schedules have affected both consumers and businesses. Many are forced to buy and use generators. According to experts, the coming winter will be one of the toughest in Ukraine’s history of independence. Under such conditions, it is logical that fuel supply must remain uninterrupted to meet the needs of the population and avoid a fuel shortage like the one in 2022.

To ease the situation in the energy sector, the government has developed a special program to enhance energy independence. Individuals can obtain a loan at 0% interest for the purchase of generators that produce electricity from alternative sources — for example, solar panels or wind turbines with energy storage systems. There is also a special program for businesses to purchase generators. Therefore, it can be assumed that in the coming years, the use of household alternative energy sources in Ukraine will only increase, which could provide an additional boost to the economy and the energy sector. Facing challenges alone is difficult, so various business sectors are coming together to address urgent issues and develop industries.

“Our ‘Fuel and Energy Business’ Association not only unites representatives of the fuel and energy sector — fuel producers and suppliers, experts, and consultants from across Ukraine — but also works on energy supply, alternative energy development, and energy efficiency projects for enterprises and communities. We develop projects and standards, provide informational support on business financing and grants, and offer information and consultation support on legal and tax issues for small and medium-sized businesses in the fuel and energy sector. In these challenging times, all of these areas are crucial for business survival and ensuring the comfort of Ukrainians,” emphasized Ihor Khirhiy, founder and chairman of the Fuel and Energy Business Association.